30 Apr Lafarge Africa Plc: Q1’2015 Result | Mixed numbers; we are not bullish on a price rally

Lafarge Africa Plc. [WAPCO] today made public its Q1’2015 results which reflected appreciable growth at the revenue line but weakened across the profit line. Find below major highlights of the result.

  • Sales up 22.63% q/q and 15.36% y/y
  • Gross margin rose 352bps q/q but fell 493bps y/y due to a 24.34% y/y jump in cost of sales
  • Operating margin contracted 687bps y/y (but up 823bps q/q) as OPEX rose 17.69% y/y (though down 13.15% q/q)
  • Pre-tax-profit rose 183.5% q/q while it fell 31.57% y/y
  • Post-tax-profit margin improved 879bps q/q. It was however down 727bps y/y
Lafarge Africa Plc | Q1’2015 Result | Income Statement Extract (in billion Naira)
Actual Q1’15 N’bn Actual Q4’2014 Actual FY’2014 Actual Q1’14 N’bn q/q change y/y change
Revenue               56.96               46.45             205.84               49.37 22.63% 15.36%
Cost of Sales               38.86               33.33             137.36               31.25 16.60% 24.34%
Gross profit               18.10               13.12               68.48               18.12 37.93% -0.13%
Gross margin 31.77% 28.25% 33.27% 36.70% 352bps -493bps
Operating expenses                 5.95                 6.85               22.76                 5.06 -13.15% 17.69%
Other income               (1.00)               (1.00)               (1.55)                (0.01) -0.30% 10988.89%
Operating profit               11.14                 5.27               44.18               13.05 111.62% -14.62%
Operating margin 19.57% 11.34% 21.46% 26.43% 823bps -687bps
Net finance income               (0.32)                 0.28               (0.54)                (0.17) -212.50% -83.14%
PBT                 8.81                 3.11               41.20               12.88 183.50% -31.57%
Tax               (0.25)               (0.21)               (6.54)                (1.86) 19.42% -86.80%
Tax rate 2.79% 6.63% 15.87% 14.46% -383bps -1167bps
PAT                 8.57                 2.90               34.66               11.02 195.14% -22.23%
Net Margin 15.04% 6.25% 16.84% 22.31% 879bps -727bps

First glance, the numbers appear mixed from a year-on-year (y/y) perspective (as the company posted sale growth while profit contracted on the back of the jump in operating expenses (OPEX) and a N2.01 billion “share of net loss from associates”. However, on a second look, the numbers show marked improvement from a quarter-on-quarter (q/q) perspective.

 

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